Magazine article American Banker

Utah Tax Proposal Gets Conditional Bank Endorsement

Magazine article American Banker

Utah Tax Proposal Gets Conditional Bank Endorsement

Article excerpt

Utah bankers are supporting a proposal to eliminate state corporate income taxes -- but on the condition that it would result in more jobs.

State Sen. Curtis S. Bramble was expected to introduce a bill in Utah's Legislature on Monday that would phase out the tax by 2012.

Sen. Bramble, a Republican, is presenting the measure to the Senate Revenue and Taxation Committee, of which he is the chairman.

The bill, which has 21 cosponsors, should be popular with lawmakers because it is the centerpiece of an economic revitalization plan that the newly elected Republican governor, John Huntsman Jr., emphasized in his campaign, Sen. Bramble said.

"Phasing out corporate income taxes should give Mr. Huntsman's administration the ability to better market Utah ... to bring more businesses to the state," the senator said.

Utah's economy has been improving. Job growth rebounded to 2.5% in 2004 from 0% the year before; nationally the rate was 1% last year, according to the Census Bureau.

But Gov. Huntsman and some lawmakers believe that repealing the tax would make Utah more competitive in attracting businesses, particularly with surrounding states that have done the same thing, Sen. Bramble said.

Wyoming and Nevada are among a handful of states with no corporate income tax. (Nevada bankers are lobbying to repeal new bank excise and branch taxes there.)

Like other states, Utah would make up the lost revenue by increasing or introducing other taxes, said Chris Roybal, the governor's senior adviser for economic development. Within the next two years the administration is expected to propose a reform package, which may include items such as a hotel occupancy or professional services tax.

Howard Headlee, the president of the Utah Bankers Association, said the group does not have an official position on the repeal but that members are generally behind it -- with caveats. …

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